What Is The Right Age To Buy Property?
We get to hear the phrase 'The sooner the better' in a lot of steps we take in our lives. But, this phrase could confuse a potential real estate investor. On one hand, those in their mid-20s consider investing in real estate due to the availability of spare money, while on the other hand, those in late-40s or early-50s consider real estate as a liability of a lifetime. So, what is the ideal age to invest in real estate? MakaaniQ gives you a quick insight:
Investing in mid-20s
This is the time when an individual starts earning and has spare money even after saving a part of it. Though today's generation is well aware of various investment tools, offering good returns, the top preference remains real estate, especially, when the returns are similar when compared to other avenues. Just that owning a property gives an investor a sense of confidence and stability.
But, on the hindsight, owning a property at an early age means that you have a financial liability on you for the next two decades. Since investing in real estate requires investors to stay disciplined, financial planning at an early stage of career can be cumbersome and inaccurate. Recession, job change, medical emergency etc. can be few reasons which can bring financial strain, hence, taking an investment-heavy responsibility at such a young age can restrict your lifestyle.
Also read: 5 Tips For Property Investors In Their 20s
Investing in 40s
Investment at the age of 40 would mean more responsibility where you cannot afford to go wrong with the choices you make. Apart from this, not much time is left for the buyer to repay the loan as several banks restrict finances to a certain age keeping in mind the capability of the borrower to pay back the amount. The credibility of such buyers is more when compared to younger ones as the investment portfolio of a 40-year-old investor is much stronger than those who have just started investing.
"Once an investor has secured a good portfolio of assets, he/she has an additional clout and credibility with banks since these properties can act as collateral for fresh loans even at the age 50 or above. Definitely, the time to experiment with 'speculative' investment should be over by this time, as one should justifiably have a healthy aversion to risk by age of 55," says Kishore Pate, Chairman and Managing Director, Amit Enterprises.
Investing in 60s
Getting finances from the bank at the age of 60 is no more a tough job. However, for the approval of the home loan, the person should have a strong understanding of the real estate market and other investment avenues along with various investment portfolios. At this age, an investor should only invest in real estate to boost his existing property portfolio even after retirement.
Since there is no ideal age to own a home, the young generation is experimenting with a different kind of lifestyle where they prefer to stay on rent, without any liability and travel across cities in search for better job opportunities. The investment is more on maintaining a lifestyle.
On the other hand, if you have a home during retirement it can prove to be a financial boon for you in times of emergency. This can also keep you away from the stress of paying monthly installments and rather invest in experiences. So if you have been staying on rent all your life, owning a home at 65 is a perfect decision, at least one tangible item that can be passed on to your future generation isn't a bad idea.